“CUP method”

Transfer PricingSection 92CSection 92C828 judgments

The decision most relied on for CUP method is Serdia Pharmaceuticals (India) (P.) Ltd. v. Asstt. CIT (44 SOT 391), cited in 39 judgments on BharatTax.

Leading authorities on CUP method

Serdia Pharmaceuticals (India) (P.) Ltd. v. Asstt. CIT

44 SOT 391 · 2011 · ITAT

citing judgments

The Comparable Uncontrolled Price (CUP) method is preferred over indirect methods for determining the arm's length price in transfer pricing matters, especially for royalty payments.

Asstt. CIT v. MSS India (P.) Ltd.

32 SOT 132 · 2009 · ITAT

citing judgments

The Comparable Uncontrolled Price (CUP) method is preferred when comparable transactions with third parties are available to determine if transfer prices are at arm's length. Transactional profit methods are considered methods of last resort.

10 Glenmark Pharmaceuticals Ltd. v. Addl. CIT

43 Taxmann.com 191 · 2014 · Reported

citing judgments

Bank guarantee commission prices are not comparable to external CUPs for benchmarking corporate guarantees in transfer pricing.

CIT v. Eicher Motors Ltd.

293 ITR 464 · 2007 · High Court

citing judgments

Expenditure by way of royalty is an allowable revenue deduction if it is for a limited license to use know-how, where the assessee is not vested with proprietary rights. This is especially true if the payment falls within a reasonable range based on comparable transactions.

CIT v. Star Paper Mills Ltd.

172 Taxmann.com 391 · 2025 · High Court

citing judgments

The transfer price for intra-group services, specifically the sale of power from a captive power plant to a manufacturing unit, can be benchmarked based on the price at which the manufacturing unit procures power from the State Electricity Board, especially when it reflects a reasonable and arm's length price.

ACIT v. MSS India (P) Ltd.

123 TTJ 657 · 2009 · ITAT

citing judgments

A transfer pricing officer (TPO) must justify preferring one method over another, such as the Transactional Net Margin Method (TNMM) over the Comparable Uncontrolled Price (CUP) method, by demonstrating fallacies in the application of the preferred standard method.

Star India P. Ltd. v. ACIT

317 ITR 292 · 2009 · ITAT

citing judgments

When analyzing international transactions, separate classes of transactions, such as fees for technical know-how, use of trademarks, and procurement, must be analyzed individually, as each impacts profits. Aggregation of such transactions is not permissible.

Gharda Chemicals Ltd. v. Oy. CIT

39 SOT 93 · 2010 · ITAT

citing judgments

The Comparable Uncontrolled Price (CUP) method is the most preferred method for determining arm's length price in international transactions, but it requires a high degree of comparability. If comparables are not identical, the CUP method may not be applicable unless another method is proven to be more reliable in the specific fact situation.

Judgments citing CUP method

Maharashtra Seamless Ltd., New Delhi vs. DCIT, Circle- 16(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 7065/DEL/2019[2012-13]Status: DisposedITAT Delhi27 Feb 2024AY 2012-13

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Ms. Supriya Mehta, CAFor Respondent: Sh. Manu Chaurasia, Sr. DR

assessee. 3 Maharashtra Seamless Ltd. 4. The above International transaction of interest received of Rs. 19,88,755/-was benchmarked by the assessee adopting CUP method, being the appropriate method. The assessee has considered JPSPL, its Associated Enterprise as the internal comparable because JPSPL (AE) has also taken the loan

Torrent Pharmaceuticals Ltd., Ahmedabad vs. ACIT, Circle-4(1)(2), Ahmedabad

In the result appeal of the Revenue is hereby partly allowed

ITA 1172/AHD/2019[2015-16]Status: DisposedITAT Ahmedabad26 Feb 2024AY 2015-16

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Vartik Choksi, With Shri DhrunalBhatt, ARsFor Respondent: Shri Ritesh Parmar, CIT-DR

Section 143(3)Section 14ASection 35Section 43BSection 80

books of account at LIBOR + 175 basis points. However, the assessee in TP report has determined ALP at LIBOR + 400 basis point as internal CUP method. 51.1 The TPO disagreed with benchmarking of the assessee by holding that interest payable by the assessee on its borrowing cannot be taken

Shree Cement Limited, Beawar vs. National Faceless Assessment Centre, Delhi

In the result, the appeal of the Revenue in ITA No

ITA 500/JPR/2023[215-16]Status: DisposedITAT Jaipur21 Feb 2024

Bench: or at the time of hearing of this appeal.

For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &

Section 115JSection 143Section 143(3)Section 144BSection 144B(1)(xvi)Section 80Section 80I

towards profit of solid waste management system assessee company has claimed the transfer price of treated solid waste being treated pond ash under CUP method by considering the realizable market value of clinker and thereafter applying PSM of 79.73%. Though the TPO accepted the approach adopted by the assessee ... year to the nearby manufacturing units of independent assessees in the State of Rajasthan @ Rs. 6.98 per unit by applying Comparable Uncontrolled Price (‘CUP’) Method. The TPO, vide order u/s 92CA(3) dated 30.01.2021 rejected the transfer price adopted by the respondent and made an adjustment ACIT vs. Shree Cement

Shree Cement Limited, Beawar vs. National Faceless Assessment Centre, Deputy Commissioner of Income Tax, Circle -2, Ajmer

ITA 498/JPR/2023[2018-19]Status: DisposedITAT Jaipur21 Feb 2024AY 2018-19

For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &

Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

Shree Cement Limited, Beawar vs. National Faceless Assessment Assessment Centre, Deputy Commissioner of Income Tax, Circle-2, Ajmer

ITA 497/JPR/2023[2017-18]Status: DisposedITAT Jaipur21 Feb 2024AY 2017-18

Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

Shree Cement Limited, Beawar vs. National Faceless Assessment Centre, Deputy Commissionerof Income Tax, Circle -2, Ajmer

In the result, the appeal of the Revenue in ITA No

ITA 496/JPR/2023[2016-17]Status: DisposedITAT Jaipur21 Feb 2024AY 2016-17

Bench: or at the time of hearing of this appeal.

For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &

Section 115JSection 143Section 143(3)Section 144BSection 144B(1)(xvi)Section 80Section 80I

Assisstant Commissioner of Income Tax, Ajmer vs. Shree Cement Ltd, Beawar

ITA 490/JPR/2023[2016-17]Status: DisposedITAT Jaipur21 Feb 2024AY 2016-17

Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

Assisstant Commissioner of Income Tax, Ajmer vs. Shree Cement Ltd, Beawar

ITA 489/JPR/2023[2015-16]Status: DisposedITAT Jaipur21 Feb 2024AY 2015-16

For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &

Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

Teejay India Private Limited., Visakhapatnam vs. The ACIT, Visakhapatnam

In the result, appeal of the assessee is partly allowed for

ITA 44/VIZ/2017[2012-2013]Status: DisposedITAT Visakhapatnam13 Feb 2024AY 2012-2013

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Ble(Through Hybrid Hearing) आयकरअपीलसं./ I.T.(Tp).A. No.44/Viz/2017 ("नधा"रणवष"/ Assessment Year : 2012-13) Teejay India Private Limited, Vs. Assistant Commissioner Of Plot No. 15, Brandix India Apparel Income Tax, City Private Limited Sez, Circle-5(1), 2Nd Floor, Direct Pudimadaka Road, Atchutapuram, Taxes Building, Mvp Double Visakhapatnam – 530 011. Road, Visakhapatnam, Pan: Aaaco 9452 H Andhra Pradesh. (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ"क"ओरसे/ Assessee By : Sri Darpan Kirpalani ""याथ"क"ओरसे/ Revenue By : Dr. Satyasai Rath, Cit-Dr

For Appellant: Sri Darpan KirpalaniFor Respondent: Dr. Satyasai Rath, CIT-DR

Section 12Section 143(2)Section 143(3)Section 92C

considering the appropriate adjustments claimed by the appellant with regards to the various peculiar economic conditions, the Ld. AO / TPO ought to apply the CUP method given the availability of similar products sold to the associated enterprises and third parties. The appellant craves to plead to include the 7 CUP ... rejected by the Ld. DRP. The Ld. AR submitted that for the AY 2011-12, this Bench of the Tribunal has accepted the CUP method as Most Appropriate Method in the assessee’s own case. The Ld. AR further submitted that as per the OECD guidelines, the assessee is allowed

DCIT, Circle-6(1), Kolkata vs. M/S. Ifb Agro Industries Ltd., Kolkata

In the result, both the appeals filed by the revenue in ITA No

ITA 491/KOL/2019[2014-15]Status: DisposedITAT Kolkata09 Feb 2024AY 2014-15

Bench: Dr. Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 14ASection 250Section 80ISection 92C

noted that both the parties have in principle accepted and agreed that the most appropriate method for determination of ALP of power tariff is CUP Method. IN the Ld. TPO’s opinion the power tariff rates/orders of the electricity generating undertakings was the most relevant indicator ... conclusion, which have extensively been extracted in the earlier paragraphs. From the foregoing the question to be decided is thatfor application of CUP Method what should be the most appropriate data and the price to be adopted. It is well understood that CUP Method can be applied where

DCIT, Circle-6(1), Kolkata vs. M/S. Ifb Agro Industries Ltd., Kolkata

In the result, both the appeals filed by the revenue in ITA No

ITA 490/KOL/2019[2013-14]Status: DisposedITAT Kolkata09 Feb 2024AY 2013-14

Bench: Dr. Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 14ASection 250Section 80ISection 92C

Castrol India Ltd, Mumbai vs. NFAC, Delhi

In the result, the issue under consideration is remitted back to the file of Assessing Officer for statistical purpose

ITA 2433/MUM/2022[2018-19]Status: DisposedITAT Mumbai07 Feb 2024AY 2018-19

Bench: Shri Vikas Awasthy, Hon’Ble & Shri S. Rifaur Rahman, Hon'Blecastrol India Limited V. National Faceless Appeal Centre Technopolis Knowledge Park Delhi Mahakali Caves Road Chakala, Andheri (E) Mumbai – 400093 Pan: Aaacc4481E (Appellant) (Respondent) Assessee Represented By : Shri Dhanesh Bafna, Ms. Chandni Shah, Shri Hardik Nirmal & Ms. Riddhi Maru Department Represented By : Ms. A. Alankrutha

Section 115Section 143(3)Section 144C(5)Section 92C

benefits received, copy of inter- company agreement, cost allocation working, user count, copy of intra group invoices, etc; (c) Purportedly applying Comparable Uncontrollable Price (CUP) method as the MAM for the benchmarking purposes and thereby arbitrarily estimating the rate/ man hours for benchmarking the transactions without following the principles ... Appellant including the details of services received, cost allocation working, copy of intra group and third-party invoices, etc. (c) Purportedly applying CUP method as the MAM for the benchmarking purposes and thereby arbitrarily estimating the rate/ man hours for benchmarking the transactions without following the principles of Section

Fulford (India) Ltd, Mumbai vs. DCIT Cir 2(1), Mumbai

In the result, appeal of assessee is partly allowed for statistical purpose

ITA 338/MUM/2014[2009-10]Status: DisposedITAT Mumbai06 Feb 2024AY 2009-10

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआ.अ.सं.338/मुं/2014(िन.व.2009-10) Fulford (India) Limited, Platina Building, 8Th Floor, C-59, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400 098 Pan: Aaacf-1795-L ...... अपीलाथ"/Appellant बनाम Vs. Dy.Commissioner Of Income Tax, Circle 2(1), Room No.561, 5Th Floor, Aaykar Bhavan, M.K.Road, Mumbai – 400 020. ..... "ितवादी/Respondent Assessee By : Shri P.J. Pardiwala, Sr. Advocate With Shri Madhur Agrawal, Advocate Revenue By : Dr. Yogesh Kamat, Cit-Dr & Shri Ujjwal Kumar Chavan, Sr.Ar सुनवाई क" ितिथ/ Date Of Hearing : 10/11/2023 घोषणा क" ितिथ/ Date Of Pronouncement : 06/02/2024 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Assessment Order Dated 13/12/2013 Passed U/S. 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 [In Short ‘The Act’], For The Assessment Year 2009-10. 2. The Facts Of The Case In Brief Are: The Assessee/Appellant Is Engaged In The Business Of Manufacturing & Distribution Of Pharmaceutical Products In 2 India. The Assessee Is A Subsidiary Of Schering-Plough Corporation, Usa. During The Period Relevant To The Assessment Year Under Appeal, The Assessee Entered Into Various International Transactions With Its Associated Enterprise(Ae). During The Course Of Assessment Proceedings The Transfer Pricing Officer (Tpo) Made Adjustment In Respect Of Following International Transactions: Sl.No. Description Of International Transaction Adjustment Made By Tpo (Amount In Rs.) 1. Import Of Active Pharmaceutical 4,81,96,325 Ingredients (Apis) 2 Import Of Finished Drug Formulations (Fdf) 15,75,53,000 Total 20,57,49,325

For Appellant: Shri P.J. Pardiwala, Sr. Advocate with Shri Madhur Agrawal, AdvocateFor Respondent: Dr. Yogesh Kamat, CIT-DR &

Section 143(3)

information regarding comparables is not completely available i.e. deficit with respect to quality, etc. the comparable so selected would not be ideal for applying CUP method. The assessee in support of its submissions has place reliance on the decision in the case of Tilda Riceland Pvt. Ltd.(supra). We find ... case of Dow Chemical International (P) Ltd. vs. ITO, 141 taxmann.com 68 (Mumbai) held that TIPS data can be used to determine ALP under CUP method. Thus, we are of the considered view that the objection raised by the assessee with regard to use of TIPS data base for selection

Honda Motorcycle and Scooter India Pvt. Ltd., Gurgaon vs. ACIT, Circle-1(1), Gurugram

In the result, appeal is partly allowed

ITA 1524/DEL/2022[2018-19]Status: DisposedITAT Delhi05 Feb 2024AY 2018-19

Bench: Shri Saktijit Dey, Vice- & Shri Pradip Kumar Kediaassessment Year: 2018-19

For Appellant: Sh. Harpreet Singh Ajmani, AdvFor Respondent: Sh. Rajesh Kumar, CIT-DR

Section 143(3)Section 92C

benchmarking of the assessee qua the payment of export commission, the TPO proceeded to benchmark the transaction independently using 3 Comparable Uncontrolled Price (CUP) method. While doing so, the TPO determined the ALP at nil on the reasoning that no services were provided to the assessee to deserve any commission ... under TNMM. However, the TPO did not accept the benchmarking of the assessee and proceeded to benchmark the payment of royalty separately by applying CUP method. While doing so, he held that sale made to AE is equivalent to sale made to self. Hence, there was no requirement

Dimexon Diamonds Ltd, Mumbai vs. ACIT Cent. Cir 1(4), Mumbai

ITA 2429/MUM/2022[2018-19]Status: DisposedITAT Mumbai30 Jan 2024AY 2018-19

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri Rajesh SimhanFor Respondent: Shri H. M. Bhatt

Section 143(3)Section 144C(13)Section 144C(5)Section 92C(3)

result, the ALP of the interest paid on issuance of CCDs at Rs. 80,49,383 was treated as Nil using the CUP method. Further the cash of Rs. 100 crore paid to DIHBV was treated as a deemed loan and benchmarked by charging interest at SBI PLR plus ... basis points on the basis of the CUP method. Accordingly, the TPO made up a total transfer pricing adjustment of Rs. 17,47,49,383, i.e. Rs. 80,49,383 in respect of international transaction pertaining to interest on CCD and Rs. 16,67,00,000 in respect of interest

Bank of Nova Scotia, Mumbai vs. Addl DIT (It) RG 3, Mumbai

ITA 4980/MUM/2017[2009-10]Status: DisposedITAT Mumbai29 Jan 2024AY 2009-10

Bench: Shri Vikas Awasthy & Shri Amarjit Singh

For Appellant: Nishant Thakkar &For Respondent: Anil Sant

Section 143(2)Section 14ASection 92C(2)

Page 1 11 Appeals The Bank of Novascotia Vs. ADIT(IT) 3(2) IN THE INCOME TAX APPELLATE TRIBUNAL “I

DCIT (It) -1(2)(1), Mumbai vs. The Bank of Nova Scotia, Mumbai

Appeal of the assessee is allowed

ITA 4898/MUM/2017[2009-10]Status: DisposedITAT Mumbai29 Jan 2024AY 2009-10

Bench: Shri Vikas Awasthy & Shri Amarjit Singh

For Appellant: Nishant Thakkar &For Respondent: Anil Sant

Section 143(2)Section 14ASection 92C(2)

Page 1 11 Appeals The Bank of Novascotia Vs. ADIT(IT) 3(2) IN THE INCOME TAX APPELLATE TRIBUNAL “I

The Bank of Nova Scotia, Mumbai vs. Addl DIT (It) RG 3, Mumbai

ITA 3862/MUM/2013[2008-09]Status: DisposedITAT Mumbai29 Jan 2024AY 2008-09

Bench: Shri Vikas Awasthy & Shri Amarjit Singh

For Appellant: Nishant Thakkar &For Respondent: Anil Sant

Section 143(2)Section 14ASection 92C(2)

Page 1 11 Appeals The Bank of Novascotia Vs. ADIT(IT) 3(2) IN THE INCOME TAX APPELLATE TRIBUNAL “I

DDIT (It) 3(2), Mumbai vs. The Bank of Nova Scotia, Mumbai

In the result, the appeals of the assessee are partly allowed and appeals of the revenue are also partly allowed

ITA 3828/MUM/2013[2008-09]Status: DisposedITAT Mumbai29 Jan 2024AY 2008-09

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita No.8841/Mum/2010 The Bank Of Nova Scotia Vs. Assistant Director Of Mittal Towers, B Wing Income Tax (It) -3(2) Nariman Point Scindia House Mumbai – 400 020 Ballard Pier Mumbai – 400 038 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaacb1536H Appellant .. Respondent It(Tp)A. No.3862/Mum/2013 The Bank Of Nova Scotia Vs. Additional Director Of Mittal Towers, B Wing Income Tax (It) -3 Nariman Point Air India Building Mumbai – 400 020 Nariman Point Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaacb1536H Appellant .. Respondent Ita.No.3989/Mum/2012 Deputy Director Of Income Vs. M/S The Bank Of Nova Tax (It) -3(2) Scotia, Mittal Towers, B Scindia House Wing, Nariman Point Ballard Pier, N. M. Road Mumbai – 400 021 Mumbai – 400 038

For Appellant: Nishant Thakkar &For Respondent: Anil Sant

Section 143(2)Section 14ASection 92C(2)

most appropriate method and TPO has determined the arm’s length price without rejecting the TNMM. The ld. Counsel also submitted that CUP method is not applicable for P a g e | 18 11 Appeals The Bank of Novascotia Vs. ADIT(IT) 3(2) determination of arm’s length price ... assessee. He further submitted that vide letter dated 11.10.2011 the assessee has brought to the information of the transfer pricing officer that CUP method cannot be applied in the case of the assessee as no public information is available with regard to the similar transaction with the third parties

The Bank of Nova Scotia, Mumbai vs. Addl CIT (It) 3, Mumbai

ITA 4036/MUM/2012[2007-08]Status: DisposedITAT Mumbai29 Jan 2024AY 2007-08

Bench: Shri Vikas Awasthy & Shri Amarjit Singh

For Appellant: Nishant Thakkar &For Respondent: Anil Sant

Section 143(2)Section 14ASection 92C(2)

Page 1 11 Appeals The Bank of Novascotia Vs. ADIT(IT) 3(2) IN THE INCOME TAX APPELLATE TRIBUNAL “I